Pharma must discuss rewarding risk more

Pharma needs to have a better conversation with the public over its definition of reward for the risk taken in innovation, a panel of experts debated recently.

Speaking at the recent Association of the British Pharmaceutical Industry annual conference, the experts said there was an issue around how pharma promotes the idea of risk and reward to the public, who generally are ignorant of the link between reward for risk and continued R&D. Likewise the NHS needed to be more transparent in its medicine spending, they said.

The problem, said Michael Thomas, partner at AT Kearney, is “we don’t tackle the debate”.

Sir Andrew Dillon, chief executive of the National Institute for Health and Clinical Excellence, agreed with the proposition that those who take risks ought to be rewarded. But added: “we’re never going to agree on this at a system or company/drug approval level, but we can on what matters to the patient and country as a whole – if we can agree on that we’re more than 50% on the way to agreeing what sort of reward.”

The introduction of value-based pricing is supposed to alleviate some of the risk/reward issues that pharma has, however, the uncertainty still surrounding VBP – 42% of conference attendees said they did not understand the proposals – means this issue has not completely disappeared. For instance, Professor Richard Sullivan, professor of cancer policy and public health and director of external affairs, King’s Health Partners Integrated Cancer Centre, questioned how a drug can be monetised when it represents benefits that are so subjective and qualitative.

Additionally, Professor Mike Drummond, professor of health economics at the University of York, noted that price flexibility was important and was already highlighted in the number of patient access schemes coming through. But he said the current VBP proposals did not confirm whether such pricing agreements would be public knowledge or kept secret. “There is a lot of benefit in keeping the prices secret. It gives companies flexibility and allows them to set different prices in different markets because the price will not be referenced in other countries. If you have lower prices in the UK, you are cutting revenues in about 20 other countries. But when the payer is a government funded by a taxpayer there is a demand for transparency.”

Meanwhile, one of the main problems cited was the slow uptake of drugs in the UK and the fear that VBP would not put an end to this. As Thomas said, pharma might make a deal on the price but if uptake is not facilitated then there is a “real issue”. Drummond said it all comes back to the risk involved: “What’s the point of doing the research if the patient can’t get to use the product – we’re working at the back end of the problem and not the front end.”

Thomas also added that more discussion was needed around “quality prescribing” and more optimal use of the patient pathway. Likewise, Sullivan noted that “medicines aren’t the only fruit” in the NHS, and indeed the drugs bill makes up just 10% of the NHS budget. The panel emphasised that some of the 90% of the NHS budget should be targeted more for savings rather than just relying on cutting drugs. “The desire for healthcare services is insatiable but we’re very pharma-philic,” Sullivan added, noting more focus could go on other areas of the health service to make it more efficient.

Meanwhile, the annual conference welcomed new ABPI president elect, Deepak Khanna, senior vice president and managing director of MSD UK, who replaces Simon Jose of GlaxoSmithKline. Khanna told the conference he wants to address the myth that medicines in the UK are expensive when in fact they are much lower than the rest of Europe, and indeed the UK’s drugs bill has decreased in recent times.

For the exclusive trade feature interview with Deepak Khanna read the June issue of PharmaTimes Magazine, out 11 June. Subscribe to receive the magazine at bit.ly/cvP2gi.